Google's current proposals do not satisfy EU Competition chief

Europe's competition chief confirmed Wednesday that he has written to Google Chairman Eric Schmidt to ask for better assurances from the company in an ongoing antitrust investigation.

"After the analysis of the market test that was concluded on June 27, I concluded that the proposals that Google sent to us are not enough to overcome our concerns," said European Union Competition Commissioner Joaquin Almunia at a press conference Wednesday.

Google has been under investigation by the European Commission since November 2010 after rivals accused the search giant of setting search algorithms to direct users to its own services and reducing the visibility of competing websites and services. It was also accused of content-scraping and imposing contractual restrictions that prevent advertisers from moving their online campaigns to rival search engines.

The Commission decided there was sufficient cause for concern, but rather than proceed directly to punitive measures, Almunia opted for a so-called Article 9 procedure, in which the company under investigation can present proposals to rectify the situation. If these proposals are accepted by the Commission, they become legally binding.

A Google spokesman said the Internet giant wants to settle the investigation and "continues to work closely with the Commission."

On April 25 Google proposed labelling its own preferred links to its own sites in search results. It also promised to include links to rival search engines for specialist restaurant search results that generate revenue for Google, remove exclusivity provisions from all future contracts and any legacy advertising contracts for five years and said it would prevent unwanted content scraping by offering tools allowing content owners to indicate that they don't want Google using their text in search results.

Interested parties were invited by the Commission to "market test" the proposals. Rivals and complainants said that the measures were not good enough and at Wednesday's news conference Almunia indicated that he agrees with them.

FairSearch Europe, a group made up of companies that have complained about Google, conducted a survey in Britain between June 18 and 22 as part of the market test.

The 1,888 respondents had a choice on a mock-up page matching Google's proposals of clicking on cameras in the Google Shopping box, on rivals' three small blue links at the bottom of the box, or on ordinary search results.

They found that one in five clicked on Google Shopping links, only one in 200 on rival links and more than half of 1,888 surveyed didn't know "Google Shopping" is paid content.

"The study provides the hard, unbiased evidence for what seemed obvious: if Google gives itself prime placement and rich graphics on the search landing page, while relegating rivals to small links, then Google's own products will prevail," said FairSearch Europe spokesman Thomas Vinjein in a statement.

Feedback from the market test will be taken into account in the Commission's final analysis. However it is the Commission that Google's remedies must satisfy, not any other party involved. If a solution isn't found, the Commission could still fine the company up to 10 percent of its annual global revenue.